Greg Seminara, Export Solutions

#2 ? This is not a mistake ! Walmart is recognized as the world’s largest retailer, with anticipated 2015 sales of around 500 billion dollars. Walmart’s International ( outside USA) sales should exceed 160 billion dollars this year. This positions Walmart International firmly as the world’s number 2 retailer, galloping ahead of Tesco ,Germany’s Metro Group and Carrefour.
Walmart International accounts for more than 29 % of total Walmart and is growing at 20 % per year through a network that includes more than 6,000 stores covering 55 different banners in 14 countries outside the USA.
International Growth Strategy
Walmart’s global recipe for success focuses on acquisitions or joint ventures with strong local supermarket operators. In phase two, they expand market share by leveraging their scale, technology, and passion for low prices. Trusted banners such as Asda ( UK) or Seiyu( Japan) are maintained to keep the local connection. Walmart’s financial reserves allow them to invest heavily in multi-format, new store development. For example, they have basically tripled their store counts in Mexico & Canada since entry. Walmart’s globalization efforts have been less impressive when they have attempted to enter a market through “green field” expansion. Walmart exited Asian markets such as Hong Kong, Indonesia, and Korea and maintains a smaller market share in Argentina after 15 years in the country. China, India, and Brazil have been identified as priority markets.

Selling to Walmart International
There are several routes to sell to Walmart International. Some will be tempted to travel to Bentonville (or Miami) to visit with global procurement managers. This avenue may be productive for private label poducers or manufacturers of general merchandise type items. Most food brands prefer to interact with Walmart’s in country buyers. This allows vendors to stay close to country specific trends and sell to all market customers, not just Walmart. Local distributors serve Walmart in every foreign country. A country based approach structured to sell to all retailers creates critical mass. This approach allowis brands to invest in consumer awareness programs ( marketing) that will ultimately drive demand for a product. A fundamental to remember that Walmart is committed to EDLP. However an EDLP cost structure in Mexico is very different than EDLP in the USA.
United Kingdom
ASDA is a crown jewel in Walmart’s international portfolio, with sales of 33 billion dollars. Walmart is #2 in the UK, ahead of Sainsbury, but still miles behind rival Tesco. ASDA looks to gain steam in 2015  visibility in greater London through rapid expansion of smaller format stores. Vendors wishing to sell to ASDA must travel to their Leeds head office. ASDA operates more autonomously than other Walmart units.

Walmart’s first international venture is perhaps its most successful. Walmart operates more than 1,600 stores  in this strategic country of 116 million people. Export Solutions estimates that Walmart accounts for 55% of total Mexico retail sales through the “Modern Trade”channel. Aurrera is their primary banner and growth vehicle in Mexico. Walmart often sources “Made in the USA” brands from Bentonville for their Mexican Walmart hypermarkets. Results tend to be mixed, as direct imported brands are usually not supported by marketing or the armies of in store merchandisers required to maintain shelf presence in Mexico.

Walmart has the potential to achieve market leadership in this high profile growth market. Carrefour, the traditional market leader is suffering and bearing the brunt of a recently announced 700 million dollar write down of assets. After a modest start in 1995 ,Walmart built a solid platform through the acquisition of: Bompreço’s 118 stores in the northern region of Brazil and Sonae’s 140 stores in the southern region. Brazil remains a bright spot for Walmart but persists as a challenging place for suppliers to do business. Look for a local distributor to guide you through the curves !

A Walmart senior executive once stated that he expected China to represent their #1 market outside the USA. They appear to be on their way, with sales in the 10 billion dollar range. Walmart surged ahead through their 2007 partnership with Trust Mart. Still, winning is not easy in China as Walmart faces heavy local competition as well as sparkling new stores from global rivals, Carrefour, Tesco, and Auchan. Walmart benefits from years of experience in navigating a complex maze of government regulations and local labor practices. Global food brands have typically not benefitted from Walmart’s ( & Tesco/Carrefour) China expansion. China’s eating habits and practices are different and high priced imported brands are regularly affordable to only a select group of consumers.

Japan represents a rare disappointment for Walmart. Credit Walmart for trying create efficiencies by avoiding century long practices of dealing with Japan’s notorious multi-tiered distribution system. Walmart has persisted in Japan, despite years of marginal performance since their initial 6.1 % investment in Seiyu. Japan represents an enigma for Walmart: Enough critical mass to avoid an embarrassing exit like Germany, but still lagging behind market leadership aspirations.

Central America
Walmart is the dominant retailer in this cluster of five countries. This region is important for USA based suppliers as these small countries are dependent on the USA for many brands. Walmart’s Central America operations have been shifted to Walmart Mexico , with regional procurement activities increasing from their Guatemala buying office. Export Solutions covers about 200 distributors in the region, each servicing Walmart and other market customers.
Future- Massmart: South Africa
Walmart owns 51 % of Massmart. Massmart includes a managed portfolio of nine wholesale and retail chains, and one buying group, each focused on high-volume, low-margin, low-cost distribution of mainly branded consumer goods for cash. The group operates in 14 countries in sub-Saharan Africa through four divisions comprising 288 stores.
Export Solutions Can Help !
Looking for strategies to optimize your sales to Walmart International ? Export Solutions covers 95 countries , including every country where Walmart operates. Creating viable,long term,strategies for selling to Walmart International and other local retailers is a fundamental part of our expertise.